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Contractual notices: The importance of clarity

October 2016 - Issue 86

Jawaby Property Investment Limited v The Interiors Group Limited (‘TIG’) is another reminder of the importance that all applications for payment, as well as payment notices and pay less notices are clear and unambiguous; it is vital that all contractual notices comply with the contract requirements and are clear, unambiguous and served in time.

On the eighth day of every month, TIG were required to submit an interim application for payment, together with supporting documentation of the breakdown of the valuation for works, which would be followed by a certificate for payment provided by Jawaby (the employer) detailing the sum to be paid.

On 7 January 2016, TIG sent an email attaching a breakdown of an ‘initial’ assessment for valuation which had not been brought up to the due date. Jawaby argued that this was not a valid Interim Application for Payment for a number of reasons, including the fact that it did not comply with the requirements for service under the contract.

The judge held that the “initial assessment for valuation” sent by email on 7 January 2016 was not a valid Interim Application as Jawaby had never dealt with or accepted this as a valid Application before. However, the arguments for rejecting the electronic transmission of the alleged Interim Application were unfounded since Jawaby had accepted six prior valuations as Interim Applications via email.

This case clearly demonstrates the reluctance of the court to give effect to alleged Interim Applications for Payment containing ambiguities, so care must always be taken to ensure clarity.